Industrial policy space is vital for resource-rich non-hegemonic powers to move up value chains amid rising demand for low-carbon technologies. However, WTO rules and Free Trade Agreements (FTAs) constrain this space. This article examines these dynamics through the modernised EU-Chile FTA and Chile’s lithium policy – in particular Chile’s preferential pricing policy. Drawing on document analysis and 22 expert interviews, the findings indicate that the FTA’s Energy and Raw Materials Chapter aligns with Chile’s current policy but narrows policy space. This reflects a fundamental tension between industrial upgrading in resource-rich non-hegemonic powers and critical mineral access strategies in hegemonic powers.
Dünhaupt et al. (Sun,) studied this question.